The customs green lane at airports is not as straightforward as many travelers often assume. In this article, we examine the challenges encountered in Israel, where passengers may risk having their personal items – such as luxury watches or handbags – confiscated. It is important to understand the rules governing the choice between the green and red lanes, as well as the necessary forms to complete in order to obtain tax relief.
Background
Anyone who flies abroad on holiday and then returns to Israel knows – or should know – the red lane at Ben Gurion Airport and the green lane. Most of us go through the green lane, which means that we do not have any products that are subject to taxes (customs, VAT, etc.). If we had any, we would have to go through the red lane, declare them and pay tax.
Last year, there were many cases of passengers who entered Israel choosing the green lane instead of the red lane, and whose products were confiscated by the customs authorities, forcing them to initiate legal proceedings. This brief overview describes the cases and the relevant legislation.
What the law states
Section 30A(a) of the Israeli Customs Ordinance states: ‘The minister of finance may impose an obligation on a person to make a customs declaration in writing, orally, by conduct or otherwise.’
Respectively, there are laws that define the red lane and the green lane at the airport and set out the duty to make a customs declaration when passing through the red lane.
Section 30D of the Customs Regulations states that ‘An entrant carrying no other goods and having in his luggage nothing other than goods exempt from customs duties […] may pass through the green lane and if he does so, he shall be deemed to have declared that he has in his luggage nothing else than goods falling within the scope of the said exemption’. A person carrying taxable goods is not covered by this regulation and must pass through the red lane.
The cases that are ‘exempt’ from customs duties are described in ‘Paragraph 7’ of the Supplement to the Customs Tariff. The basic rule is that these are the goods with a price of less than $200 or small quantities of alcohol/ cigarettes. However, there are also additional exemptions depending on the identity of the arriving passenger that are not limited by the $200 threshold: tourists, foreigners, immigrants, returnees/ students. Under certain conditions, they may bring personal items (clothing, shoes, toiletries), tools, used electronic devices, used jewelry and more without paying tax, even if they are more expensive than $200.
In the guide issued by the Customs Authority for travelers returning from abroad [1], it states that an exemption applies to every traveler (including non-tourists, etc.) for clothing, shoes and toiletries, of the type and quantity normally carried in hand luggage, and for all products costing up to $200.
In a special situation where a person leaves Israel with an item and then returns to Israel with the same item, he must fill out a customs form before departure, called Form 86, which gives him the right not to pay tax on his return to Israel. In my opinion, this form is not known to the public and almost no one fills it out, which can cause problems when returning to Israel.
In addition, the customs authority usually imposes an administrative penalty in accordance with the Administrative Offences Act of 1985 and the Administrative Offences (Administrative Penalties – Tax Legislation) Decree of 1987, which established an administrative penalty of 100% of the unpaid taxes (i.e. the taxes are paid a second time). In this regard, it is clear that the amount of taxes is derived from the value of the items, and in almost every case involving luxury items, there is a legal dispute over the value of the items, with each side calling in experts to value them.
Customs’ seizure and confiscation authority goes back to the British Mandate period
Most of the laws in the Code of the State of Israel are (relatively) new, but in some area’s regulations from the British Mandate period have survived to this day. One of these is the Customs ordinance. Although the ordinance has been updated and amended over the years, there are sections that were written almost 100 years ago and have survived to this day. For example, a section that sets out the seizure and confiscation powers of the customs authority in relation to smuggled or improperly declared goods.
If a traveler passes through the green lane and carries a good worth more than $200 that does not fall under one of the exemptions (clothing, etc.), the customs authority considers it to be smuggling. This entitles the authority to confiscate it. Since the Customs ordinance was enacted many years before the Basic Laws of the State of Israel (freedom of occupation, human dignity and liberty), the ordinance cannot be cancelled due to a conflict with the Basic Laws, and the courts do everything in their power to interpret the confiscation powers liberally.
In addition, the time limits in this legislation are relatively short – a person has 30 days from the time the customs authority announces a seizure to write a reasoned letter of request, otherwise the goods will be confiscated. If the person has submitted a letter and customs rejects it, they have 60 days to go to court. Many travelers are unaware of the time limits and lose their goods for this reason alone.
Interesting cases discussed in court rulings
A review has shown that in most cases where no compromise has been reached, the court sides with the customs authority and confirms the seizure. However, there are also interesting cases in which the courts have ruled in favor of the citizen.
In a judgment delivered in November 2024, a luxury watch was confiscated from an Israeli citizen returning from abroad. There were two persons involved in this event: the woman who was the watch owner, and another person who entered the green lane wearing the watch, and the watch documents were found in his luggage. The passenger tried to explain that she had given the watch to this person to try on, while the customs authority logically claimed that it was a fraud and a planned distribution to deceive customs. Nevertheless, the court ruled in favor of the citizen, stating that the sanction of confiscation was too extreme and a less severe sanction could suffice (e.g. payment of taxes, fine) [2].
In a case decided in 2020, the court accepted a passenger’s claim that he had arrived in Israel with three luxury watches, which were later destined for export, and cancelled the confiscation by customs [3].
Cases to be decided in the future
As part of my work, I am currently handling a large number of cases where customs has decided to confiscate the products and the citizen is forced to take legal action, where the court will decide whether or not to confiscate the products:
- an Israeli citizen returned from Europe with a Rolex watch that he wanted to wear in his wedding;
- an Israeli citizen who had lived in the USA for many years came to Israel with three luxury watches that he wanted to wear during his holiday and then bring back to the USA;
- an Israeli citizen who had lived in Europe for many years and came to Israel with a small quantity of used luxury handbags for personal use while on holiday and intended to return to Europe;
- an Israeli citizen flew to Europe with three used handbags for a short holiday and intended to return to Israel with them.
In all these cases, there is no convincing evidence that the goods were imported for commercial purposes (for sale to customers) and it is merely a suspicion on the part of the Customs authority. Furthermore, in the cases in question, the travelers did not fill in the customs form 86 in which they declared the transfer of items from abroad, apparently out of ignorance, but they had other evidence that the items were with them in Israel and left the country and then returned.
In all cases, the issue is not customs duties (as customs duties have been abolished on most goods), but the import VAT of 17%.
In most cases, these are second-hand items that the citizen has used for many years.
In some cases, the court will have to decide whether a watch qualifies as ‘jewelry’ because there is a specific exception for ‘second-hand jewelry’.
In some cases, the court will have to decide whether a woman’s bag qualifies as ‘clothing’ in a broad interpretation because there is an exception for ‘clothing’ if it is imported in reasonable quantity and regardless of value.
Concluding notes
The powers of the Customs authorities are clear: any imported goods that cost more than $200 and are not covered by the exemption must be declared. However, one gets the impression that the customs authorities are taking the situation to extremes and regard every traveler as a potential smuggler. Should a married woman or man take off their wedding ring when entering Israel? Is a woman not allowed to take several bags for personal use? Perhaps we should wait for the court to rule on this.
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References
[1] Customs guide for travelers returning from abroad
[2] Civil file (Magistrate court-Haifa) 48454-11-21 Dina Seker vs. The State of Israel (25.11.24). Customs Authority appealed to the District court and the procedure is pending.
[3] Civil file (Magistrate court-Ramla) 46864-03-18 Wolf Meir Investments and Trade ltd. Vs. The State of Israel (31.8.20).